Nvidia fiscal Q2 revenues were down and that's why it lost $120.9 million, 22 cents a share, in the second quarter.

Well, that and the $198 million one-time charge it took to cover costs stemming from those previously admitted defective notebook chips coupled with - its CEO said - a supposedly weaker worldwide PC market and Nvidia's miscalculations of AMD's pricing pressures on its desktop GPU business.

Nvidia's revenues were down 5% to $892.7 million on ASPs down 25%.

The pundits expected earnings of 12 cents a share on sales of $908.4 million although the graphics house lowered its estimates to $875 million-$950 million when it realized its chips were screwed. Previously the estimates were for revenues of $1.1 billion.

The news came on the same day that rival ATI released a graphics card that's supposed to be the cat's pajamas.

Nvidia promised to up its stock buyback by a billion dollars to $2.7 billion so its shares roses 10% in after-hours trading Tuesday.

The company's notebook and workstation business was up 27% year-over-year.

CEO Jen-Hsun Huang said Nvidia was approaching "the near-term with caution" and couldn't forecast revenues this quarter though they should be up "slightly." He promised "pricing actions" and "cost improvements."

The company needs to sell off its 65nm inventory and get to 55nm. It also needs deeper penetration of low-cost PCs.

About Maureen O'GaraMaureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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